Sales reports: Palm Beach condo action more robust in second-quarter

Darrell Hofheinz @PBDN_hofheinz

Friday

Jul 20, 2018 at 12:01 AMJul 20, 2018 at 1:20 PM

For the first time in several years, a more robust Palm Beach condominium market grabbed the spotlight in second-quarter sales reports released this week by four real estate companies operating on the island.

Meanwhile, sales of single-family properties generally continued to show strength in April, May and June compared to the same period a year ago, according to reports from agencies Douglas Elliman Real Estate, the Corcoran Group and Brown Harris Stevens, along with an analysis prepared by Frisbie Palm Beach Real Estate.

The reports draw data from different sales sources and analyze different property criteria, so direct comparisons among them are impossible. But they do offer some general takeaways about the island’s real estate scene.

“We saw a sales boom of condos, the most in three years,” said analyst Jonathan Miller of New York-based Miller Samuel Real Estate Appraisers & Consultants. Miller parses Palm Beach sales data from the multiple listing service in compiling several South Florida market reports for Douglas Elliman.

RELATED: Read more Palm Beach real estate news

The Elliman Report noted about a 26 percent increase in Palm Beach condominium and townhouse sales in the second quarter — a jump from 92 last year to 116 this year.

But those units, by and large, traded at lower prices, the report shows. The median sales price dropped about 23 percent, from $810,000 in last year’s second quarter to $625,000 in April, May and June. The median is the price at which half of the units sold for more and half for less.

The sales price drop likely reflected more sales of smaller apartments than larger units in the second quarter, as buyers weeded out lower-priced condos that had swelled the inventory over the past few years, Miller said.

“Older inventory is being sold off, so you’re clearing the market,” Miller said, adding that inventory has tightened while the sales pace has increased.

RELATED: Why was the season’s real estate market so busy in Palm Beach?

Sold in April for a recorded $11.5 million, Unit S-24 at 2 N. Breakers Row has a living room with windows facing the Atlantic Ocean. Agent Cristina Condon of Sotheby’s International Realty handled both sides of the sale. Photo by Brantley Photography, courtesy Sotheby’s International Realty

Brantley Photography, courtesy Sotheby’s International Realty

The second-quarter Corcoran Report also took note of the increase in year-over-year condo sales, said John Hackett, whose regional duties as senior managing director at the Corcoran Group include overseeing the Palm Beach brokerage. Bill Yahn, who previously held that role, has moved on to other duties with the agency.

Echoing other real estate observers, Hackett mentioned December’s federal tax-cut overhaul for providing “a catalyst” that has encouraged many affluent buyers to take the plunge in Palm Beach. Florida also offers a more favorable tax picture than many other states, which also has encouraged buyers to sign contracts in Palm Beach.

The condo market, like the single-family one, also has been boosted by the strength of the economy. And many buyers see a condo as an entry point to living in Palm Beach, Hackett added.

“The condos allow buyers to live in Palm Beach for under $3 million,” he said, noting how difficult it is to find a single-family house in that price point.

But not all Palm Beach condos are relatively bargain-priced. The most expensive condo sold in the second quarter involved Unit No. S-24, which changed hands in April for a recorded $11.5 million at 2 N. Breakers Row.

With 7,191 total square feet, Penthouse 7 in the south building at Bellaria, 3000 S. Ocean Blvd., changed hands in May for a $6.7 million. Sales associatesJohn M. Campbell and Colleen Jackson Hanson of the Corcoran Group were the listing agents, with Brown Harris Stevens agents A. Whitney McGurk and Liza Pulitzer acting on behalf of the buyers.

Hometakes.com, courtesy of the Corcoran Group

Palm Beach condo sales, Hackett added, typically are stronger in the second quarter because many buyers shop for properties during the winter season and close those sales in April, May and June. One benefit is that they can embark on renovations during the summer and early fall — the only time when Palm Beach buildings typically allow construction projects.

Hackett also drew comparisons among Palm Beach condos and those in under-construction luxury buildings just outside town, including The Bristol lakefront tower across the Royal Park Bridge and the beachfront 3550 South Ocean building in South Palm Beach. Compared to the top-dollar prices at The Bristol, for instance, Palm Beach’s condos offer a relative bargain and often water views, even if they don’t have comparable amenities, Hackett said.

RELATED: Palm Beach oceanfront condo fetches $11.5 million

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On the single-family scene

As for single-family properties, Brown Harris Stevens’ report showed 50 transactions closed in the second quarter, an 11 percent increase over the same period last year. That continues a trend toward more sales, which began after the first of the year, according to the first-quarter sales reports released in April.

This lakefront estate at 1485 S. Ocean Blvd. on Billionaires Row has sold for a recorded $41.257 million. Broker Christian Angle of Christian Angle Real Estate represented the buyer and the sller. Photo by Andy Frame

Andy Frame

The Brown Harris Stevens analysis also reported an increase in the second-quarter average single-family sales price, which rose 13 percent, year over year, from about $7.1 million to about $8 million.

The report noted that the single-family price increase was driven by seven second-quarter sales over $12 million, including a property at 1485 S. Ocean Blvd. that sold for $41.3 million and one at 1800 S. Ocean Blvd. that fetched $37 million.

RELATED: Billionaires Row estate fetches $41.3 million, deed shows

RELATED: Ocean-to-lake estate on Billionaires Row sells for $37 million

Taking a broad view of the market was the report issued by Frisbie Palm Beach Real Estate, which is headed by Suzanne Frisbie, a Corcoran agent and principal of the real estate development and investment firm Frisbie Group. She also serves as president of the Palm Beach Board of Realtors.

In addition to presenting second-quarter sales figures, the Frisbie report noted that real estate activity last year “evidenced a record performance for Palm Beach.” The report mentioned increases recorded in 2017 for dollar volume, number of transactions, average prices and median prices.

“The first half of 2018’s data suggests a continuation of this positive direction, and barring political upheavals, a global trade war or an unforeseen event, we predict the balance of 2018 will continue its forward trend,” the report said.

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The reports are expected to be posted today on the real estate agencies’ websites. Click the “About” link at BHSUSA.com, the “Blog” link at Corcoran.com, and the “Market Reports” links at Elliman.com. The Frisbie Palm Beach Real Estate report can be found here.